In the past people used to trade goods and services to get what they did not have and this is how banking in kenya was done. For example a cow could be traded for vegetables and there was no exchange of funds. The traders would meet to make the exchange. When there was a surplus, the trader with the surplus would sell his goods at lower prices. This trading was mainly controlled by the forces of demand and supply. If there was no demand especially for perishable goods, the trader would be a great loss. Wealth was held as a physical item since it did not have monetary value.
Banking in Kenya made Easy
With development, the monetary system was introduced. This development made the banking system imperative as it was necessary to store the money as it could easily be stolen. The simplest way to describe traditional banking business is collection of deposits and lending the same funds to those who qualify for loans. The banking system has come a long way from the barter trading to electronic funds transfer. The changes in banking are closely linked to the fast and furious changes and developments in electronics and technology.
A bank is therefore the building that holds these monies in various accounts. The monies may not be in the safes or vaults of the building but the various accounts that customers hold are used to know how much money is in the bank and what the bank is worth.
How Banking in Kenya Works
Customers may want to borrow funds from the bank, and when they have qualified, the bank will advance them these monies on the terms that have been agreed. The banks will give out money at higher rates than the interest it will pay to the depositors. Successful banks are those that are able to balance the inflows of monies versus the outflows and the amounts being earned on each sale.
The bigger the banks the wider the range of services on offer. Banking in Kenya has developed with technology and customers have a wide offering of services from the banks